$750 Mil in Acquisitions: Why TCS, Infosys and other IT stocks are on an acquisition spree

India’s leading software services companies have sharply increased their acquisition activity in 2025 after a two-year slowdown. The renewed pace of dealmaking comes as large IT firms look to bolster capabilities in areas that are seeing strong global demand, including AI, engineering services and software products.

Seven Deals Worth Over USD 750 Million in 2025

Tata Consultancy Services (TCS), Infosys, HCLTech, Wipro, and Tech Mahindra together have already executed seven acquisitions so far in 2025, compared to five in 2024 and just two in 2023, based on Tracxn data. The total disclosed deal value crosses roughly USD 750 million, led by Wipro’s USD 375 million acquisition of Harman’s Digital Transformation Solutions (DTS) business unit.

The acquisition list for 2025 includes TCS’ USD 72.8 million purchase of ListEngage; three deals by Infosys such as a 75 percent stake in Verset for USD 153 million, The Missing Link for USD 98 million, and MRE Consulting for USD 36 million; and HCLTech’s acquisition of Nuance for USD 15.6 million. These deals largely focused on strengthening capabilities in AI, software products, and engineering services while expanding geographical reach.

Why Engineering Services Are at the Centre of IT M&A?

Industry experts note that engineering services has emerged as one of the most concentrated acquisition areas in the last two years. Infosys’ earlier buyouts of in-tech for automotive engineering and InSemi for semiconductor engineering in 2024, Wipro’s takeover of Harman’s DTS unit in 2025, and HCLTech’s acquisition of ASAP Group in 2023 underline this trend.

Engineering has become a major priority because companies require more specialised capability in a growing market, and acquisitions help either build capability or expand geographic presence. Yugal Joshi, partner at Everest Group, noted that current macroeconomic conditions make acquiring assets more viable for IT companies.

Even with the fresh momentum, acquisition numbers continue to trail earlier highs. The top five IT firms acquired 17 companies in 2021 and 16 in 2020. Tech Mahindra, Wipro, and HCLTech were the most aggressive during this period, with Tech Mahindra buying 11 companies in 2021, while Wipro and HCLTech executed four each in 2021 and 2022 respectively.

Shift Toward Smaller, Capability-Driven Deals

Analysts point to a shift in capital allocation priorities, with large-cap IT companies focusing on tuck-in acquisitions that add specific capabilities. Phillip Capital’s Karan Uppal noted that large-cap IT firms are increasingly targeting engineering research and development (ER&D) players.

Smaller acquisitions also allow IT companies to gain both capability and clients. For instance, in-tech, acquired by Infosys, already worked with several German OEMs including Daimler.

Experts believe Indian IT companies are unlikely to pursue long-gestation technologies such as quantum computing. Firms prefer immediate-impact acquisitions and do not have the appetite for long-term speculative bets.

-Manan Gangwar

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